New Delhi: As chief economic advisor, Arvind Virmani is the principal author of the Economic Survey. A key member of the government’s economic policy team, Virmani spoke to Mint immediately after the release of the 2009 survey. Edited excerpts:
What is the central message that the survey carries?
Big message: Virmani is the principal author of the survey. Pankaj Nangia / Bloomberg
The...message which one has been trying to give out is that you cannot take growth for granted... There is nothing to despair (about) and there is nothing to rest on your (past) laurels. There will be things that you are going to have to do. That is the message I am trying to send out. ...So that’s the big message. If you want to go back to the high growth part and to maintain it, then there is an agenda of reforms for the next four-five years which must be followed. And if none of this is followed, I would be very surprised if growth is 9% five years from now.
So it would be fair to surmise that you are cautious, but optimistic?
Yes. I am not very good with words, but it’s been well summarized in this chapter here... “A balanced perspective suggests that neither should one rest on the past laurels nor should the present setback weaken the determination to return the economy to the high growth path at the earliest. High growth is critical to ensure the revenues, needed for meeting our social welfare objectives.” So that’s another subtle social welfare message there. All these social welfare messages are very good, but if you don’t have the growth and you don’t have the revenues (to sustain them)....
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It also says that there is a possibility of acceleration in growth from the second half of this fiscal...
That’s right. That is basically since the end of the last fiscal year what one has been seeing and in some sense one is surer of it, that’s why we actually for the first time put (it) in a forecast.
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The overall growth scenario... You’re a little sceptical about green shoots and so on. Questions are being asked on whether asset prices have more to do with monetary loosening the world over.
The asset price we are really talking about (is) the oil price rise...actually commodity price rise. That’s the real concern than the asset price. And that is this issue of ...remember the oil price went down to $40 and now it’s come (back) to $70 plus. So I would read it more in the context of oil price, because that is what concerns us from the negative shock side.
Is it one of the factors that has made you increase the range for the growth forecast.